What is that thing?

PZ Myers of Pharyngula is trying to identify the fuzzy thing at right:

I got a request to help identify this bizarre creature. I'm guessing it's a slug caterpillar, from the family Limacodidae, although I couldn't possibly narrow it down further, and could be completely wrong. Whoever was filming it can be heard telling someone not to touch it—which is a good idea. These things shed fine hairs that can cause a painful allergic rash.

It's kind of cute, anyway. ...

Update: He thinks it's a puss caterpillar or Southern flannel moth, Megalopyge opercularis, which means it will eventually look like this: